Determination of Fraudulent Financial Statements in Indonesia
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fraudulent,
financial statement,
hexagon theory
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Abstract
This study intends to examine the causations of fraudulent financial statement in Indonesia based on The Fraud Hexagon Theory. It uses secondary data from Indonesia’s companies that have history of doing fraudulent financial statement and delisting from Indonesia Stock Exchange, for the year 2010 until 2020. Data analysis was carried out with logistic regression method. The study views the company as a single party that commits fraudulent financial statements. Result shows pressure (ROA), arrogance (CEO dismissal) and collusion (whistle blowing system implementation) statistically have correlation with fraudulent financial statements. To the contrary, other fraud elements such opportunity (numbers of internal auditors), rationalization (total accrual), and capability (good governance implementation), statistically have no correlation with fraudulent financial statement. Simultaneously, all variables used in this study affect fraudulent financial statements.
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